The automaker will also use some of the money for new manufacturing upgrades.
Volvo is very much focused on sustainability. The automaker recently announced that it would no longer be offering leather in its cars from 2030, and its future automobiles will be exceptionally eco-friendly. The Volvo XC90, arguably the most famous and desirable vehicle in the brand's current lineup, will be going all-electric too, getting a new name in the process. Along with sister company Polestar, the Swedish carmaker is clearly not looking to do anything but maximize efficiency through electric vehicles, and to help it get even better at that, has now announced a massive investment in battery development and manufacturing worth SEK 30 billion (over $3.3 billion).
Volvo Cars and Northvolt will be opening a joint research and development center in Gothenburg, Sweden, as part of this investment. This will become operational next year and will create "a few hundred" jobs as the brand aims to become one of the few to make "battery cell development and production part of its end-to-end engineering capabilities." Once this new R&D center has been established, a new manufacturing plant will be constructed in Europe to produce next-generation state-of-the-art battery cells. A site for this plant has not yet been agreed upon, but this should be confirmed early next year too.
When the plant is operational, Volvo predicts a potential annual capacity of 50 GWh, which would supply batteries for around half a million cars per year. Construction of the facility will begin in 2023, with large-scale production beginning in 2026. 3,000 new jobs are expected to become available here. The new batteries produced through this partnership with Northvolt will be tailor-made to give Volvo drivers good range and quick charging times. Furthermore, this investment could ultimately help reduce costs as "the battery represents the largest individual cost component in an electric car." Once this is up and running, we're sure that Volvo will be ready to assert itself as a true EV leader. Hopefully, this will translate to more affordable electric luxury cars.